Part 1: Analytics: A blueprint for value - Converting big data and analytics insights into results
This is Part 1 in a 14 part series that is my attempt to present, in small easily consumable bites, findings and text from IBM Institute for Business Value’s latest study and paper - “Analytics: A blueprint for value - Converting big data and analytics insights into results”.
In the paper, my colleagues Fred Balboni, Glenn Finch, Cathy Rodenbeck Reese and Rebecca Shockley write that in today’s competitive marketplace, executive leaders are racing to convert data-driven insights into meaningful results. Successful leaders are infusing analytics throughout their organizations to drive smarter decisions, enable faster actions and optimize outcomes. These are among the key findings from the 2013 IBM Institute for Business Value research study on how organizations around the globe are leveraging key capabilities to amplify their ability to create value from big data and analytics.
The IBM Institute for Business Value has researched the field of analytics at ever-increasing levels of granularity since 2009. Our research, combined with the on-the-ground experience of thousands of consultants, continues to probe deeper into the fundamental question: How can organizations achieve positive returns on their analytic investments by taking advantage of the growing amounts of data?
We’ve determined it takes the right alignment of strategy, technology and organizational structure. Analytic implementation strategies need to enable an organization’s most important business objectives; the technology in place needs to support the analytics strategy; and the organization’s culture needs to evolve so people use the technology to take action in line with the strategy. The proper alignment of these three key dimensions is needed to create tangible value and results-based outcomes.
To discover how to achieve this alignment of strategy, technology and structure, we surveyed 900 business and IT executives from 70 countries. We asked more than 50 questions to an analytics-savvy group of executives, senior managers and managers, along with analytics experts, business and data analysts, and others within organizations large and small. The questions were designed to reveal how to translate high-level concepts associated with delivering exceptional business value through analytics into actions that can truly deliver value. Through our research, we identified nine levers that enable organizations to create value from an ever-growing volume of data from a variety of sources – value that results from insights derived and actions taken at every level of the organization.
Nine levers of differentiation
These nine levers represent the sets of capabilities that most differentiated Leaders from other respondents:
- Culture: Availability and use of data and analytics within an organization
- Data: Structure and formality of the organization’s data governance process and the security of its data
- Expertise: Development of and access to data management and analytic skills and capabilities
- Funding: Financial rigor in the analytics funding process
- Measurement: Evaluating the impact on business outcomes
- Platform: Integrated capabilities delivered by hardware and software
- Source of value: Actions and decisions that generate results
- Sponsorship: Executive support and involvement
- Trust: Organizational confidence
There is a strong correlation between organizations that excel at these levers and those that create the greatest value from analytics. The levers – all present at a consistently high level of capability within Leader organizations – are interrelated. Taken individually, each of the levers does not equal one-ninth of the solution. Organizations that invest in these nine levers – with particular attention to the symbiotic relationships that exist – can accelerate value creation, simplify analytics implementation and realize value from analytic investments.
Learning from Leaders
To understand the best practice benchmarks for executing these levers – combinations of activities focused on analytics development and delivery – we examined the top 19 percent of respondents who identify their organization as substantially outperforming their industry and market peers and attribute much of their success to analytics. Throughout this document, we will refer to this top group as Leaders.
Leaders, it turns out, implement the nine levers in very similar ways, creating a common pattern in the behaviors organizations undertake to create value from analytics. By examining the Leaders’ behavior, organizations still navigating the realities of their unique workplaces can begin to move forward with their own analytics implementations.
But Leaders are also similar to other organizations in one key way: They face the same political constraints and corporate realities. More than half (62 percent) cite some form of political or executive constraint as the top business challenge holding them back from delivering even greater value from analytics. This percentage among Leaders is statistically consistent with other organizations. What does set Leaders apart, however, is an observable pattern of implementing processes designed to minimize disruptive politics or other constraints.
In Part 2 in our series, we will take a closer look at these levers and how some of them have greater influence on an organization’s ability to deliver value from the data and analytics.